Deal size: Undisclosed
Why it's relevant? If there's been a theme to our Top M&As feature, it's that most of the companies profiled are not just acquiring smaller companies to spur growth, but to fill in essential pieces of the business services puzzle-one that keeps changing and growing as businesses continue to take advantage of a dynamic technological environment.
Earthlink's (Nasdaq: ELNK) purchase of Business Vitals is an example of the focused strategy these companies are employing: the security component that the South Carolina-based managed IT services provider brought to Earthlink was a key motivator in the deal.
"EarthLink is building a full range of managed IT services that focus on security as a key capability," said Brian Fink, executive vice president of managed services for Earthlink, in the deal announcement. "Business Vitals is an important extension of our managed services portfolio."
The Business Vitals deal was one of a number of acquisitions in 2011 following Earthlink's two significant 2010 purchases of One Communications and Deltacom, which gave the provider a national footprint, but its security component was an important addition.
Like other service providers, Earthlink is looking to be as much of a full service provider as possible to businesses. Vikram Desai, president of Earthlink Advanced Services, explained in a recent interview with FierceTelecom that multisite business customers need to be able to maintain quality and security of voice and data services no matter where their offices are located, a requirement that has become much more complex with the rise of IP technologies. He feels that cable MSOs, many of which are making headway in the business services segment, are inhibited by their regional footprint.
"Imagine you're a business and you can get dial tone and data connectivity inside a cable operator's footprint, but what happens when you go outside that footprint? All of a sudden you're managing a complex situation," said Desai. "...Our value proposition is to make it simple for businesses to leverage advanced technology that we manage for them."